incremantial cash flow Cost of machine 180000 Salary

Transportation charges 3000 variable overtimeInstallation cost 15000 Fringe benefits

Old machine salvage value -30281 Cost of defects 167719 Annual maintenance

operational cash flow1 2 3 4 5

Saving 39000 39000 39000 39000 39000Less dep. 33543.8 26835.04 21468.03 17174.43 0EBT 5456.2 12164.96 17531.97 21825.57 39000Less Tax@35% 1909.67 4257.736 6136.189 7638.951 13650PAT 3546.53 7907.224 11395.78 14186.62 25350ADD Dep… 33543.8 26835.04 21468.03 17174.43 0CFAt 37090.33 34742.26 32863.81 31361.05 25350

Terminal cash flowAdd salvage value 20000Tax avantage 17044.2

37090.33 34742.26 32863.81 31361.05 62394.20.869565 0.756144 0.657516 0.571753 0.497177

PV 32252.46 26270.14 21608.49 17930.78 31020.94 129082.8NPV -38636.18

Depriciation base for the new machine

Pvif@15%

Existing situation new situation Diffrence's36000 0 36000

3000 0 30003000 0 30003000 3000 0

0 3000 -300045000 6000 39000

Depriciation sheduleB.V Dep.

1 167719 33543.82 134175.2 26835.043 107340.2 21468.034 85872.13 17174.435 68697.7 13739.54